IDFC FIRST Bank Q1 FY 25 PAT at Rs. 681 crores

Financial result sata glance

TheBoardof Directors ofIDFCFIRSTBank,initsmeetingheldtoday, approvedthe unaudited financialresults for the quarter ended June 30, 2024.

Deposits & Borrowings

• Total Deposits of the Bank increased by8%YOY from Rs. 1,54,427 croreas ofJune 30, 2023 to Rs.2,09,666 croreas of June 30, 2024.
• Customer Deposits increased by 8% YOY from Rs. 1,48,474 croreas of June 30, 2023 to Rs. 2,04,572 croreas of June 30, 2024.
• CASA Deposits grew by 1% YOY from Rs. 71,765 croreas of June 30, 2023 to Rs. 97,692 croreas ofJune 30, 2024.
• CASARatiostoodat6%asofJune30,2024.
• Retail Deposits grew by 5% YOY from Rs. 1,14,272 croreas of June 30, 2023 to Rs. 1,64,001 crore as of June 30, 2024.
• RetailDepositsconstitutes2%oftotalcustomerdepositsasofJune30,2024.
• LegacyHighCostBorrowingsreducedfrom16,055croreasofJune30,2023toRs.10,084croreasof June 30, 2024.
• TheBankopened11newbranchesduringQ1FY25toreachbranch countof955by June30,

Loan sand Advances

• Loans and Advances (including creditsubstitutes) increased by 0% YOY from Rs. 1,71,578 croreas of June 30, 2023 to Rs. 2,09,361 croreas of June 30, 2024.
• TheBankcontinuestowinddowninfrastructurefinancingasperthestatedstrategyandnowconstitutes only 3% of total funded assets as of June 30, 2024.
• Exposuretotop20singleborrowersimprovedfrom0%asofJune30,2023to5.4%asofJune30,2024.
• CredittoDepositRatioimprovedfrom3%asofJune30,2023to98.1%asof June 30, 2024.
• IncrementalCredittoDepositratiobetweenJune30,2023toJune30,2024was1%.

Assets Quality

• GrossNPAofthebankhasimprovedfrom17%asofJune30,2023to1.90%ofJune30,2024,improved by 27 bps on YOY basis.
• NetNPAof the bankhas improved from70%as of June30, 2023 to 0.59% of June30, 2024, improved by 11 bps on YOY basis.
• GrossNPAoftheRetail,RuralandMSMEFinancehasimprovedfrom53%asofJune30,2023to1.46%

asofJune30,2024,improvedby7bpson YOYbasis.

• NetNPAofthe Retail, RuralandMSMEFinance hasimprovedfrom52%asof June 30,2023to0.46%

asofJune30,2024,improvedby6bpson YOYbasis.

• Excludingtheinfrastructurefinancingbook,whichtheBankisrunningdown,theGNPAandNNPAofthe Bank would have been 60% and 0.43% respectively as of June 30, 2024.

• SMA-1andSMA-2inRetail,RuralandMSMEFinanceportfoliocontinuestobelowat01%,butincreased from 0.85% as of March 31, 2024 due to rise in SMAs of JLG book (due to floods) which increased from 1.26% as of March 31, 2024 to 1.70% as of June 30, 2024.
• Provisioncoverageratio(excludingtechnicalwrite-off)ofthebankhasincreasedfrom11%asofJune 30, 2023 to 69.38% as of June 30, 2024. Excluding the run-down infrastructure book, PCR was at 73.48%

atJune30,24.

Profitability

• NetInterestIncome(NII)grew25%YOYfromRs.3,745croreinQ1FY24to4,695croreinQ1FY25.
• NetInterestMargin(GrossofIBPCandsell-down)reducedfrom33%inQ1FY24to6.22%inQ1FY25.
• FeeandOtherIncomegrewby19%YOYfromRs.1,341croreinQ1FY24to1,595croreinQ1 FY25.
• CoreOperatingincomegrew24%fromRs.5,086croreinQ1FY24to6,290croreinQ1 FY25.
• OperatingExpensegrewby21%YOYfromRs.3,659croreinQ1FY24to4,432croreinQ1 FY25.
• CoreOperatingProfitgrewby30%YOYfrom1,427croreinQ1FY24toRs.1,858croreforQ1FY25.
• Provisions increased 109% YOY from 476 crorein Q1 FY24 to Rs. 994 crorein Q1 FY25. This was primarily due to rise in provisions of JLG portfolio, impacted by the flood in Tamil Nadu and seasonal impact.
• Theannualizedcreditcostas%ofaveragefundedassets(grossofIBPC)forQ1FY25was90%.Without theimpactofJLG book,theannualizedcreditcostas % ofaveragefundedassetsforQ1-FY25 was1.70%. Bank expects the credit cost to get normalized from Q3-FY25 onwards.
• NetProfitde-grew11%YOYfrom765 croreinQ1FY24toRs. 681croreinQ1FY25.Excludingtrading gains from respective period, the degrowth in profit was at 7% YOY.
• Provisions for JLG business was higher by Rs. 132 crores in Q1 FY 25 over the Q1 FY 24. Excepting this impact, the PAT for the quarter would have been higher by Rs. 100 crores.
• RoAstoodat91%andRoEstood at8.32%inQ1FY25.

Capital Position

• CapitalAdequacy includingprofitfor Q1-25 wasstrong at 88% withCET-1 Ratioat 13.34% as on June 30, 2024. Including Capital raised in July 2024, the Capital Adequacy Ratio as on June 30, 2024 would be 17.21%, with CET-1 ratio at 14.67%.

Comments from Managing Director & CEO

Mr.Vaidyanathan , Managing Director and CEO , IDFC FIRST Bank , said,

“The biggest requirement in Banking today is the ability to raise deposits. On this front, we continue to get stronggrowthindepositsbasedontop qualityservicelevels,topinclassmobileApp,andexcellentcorporate governance.OurCASAratioissustainedat46.6%.Our customerdepositshavegrown38% YoY.Wethankour customers for their goodwill towards us.

Overall Gross NPA was stable at1.90% andNetNPA was 0.59%. Provisions normalizedthis quarter inline withtheindustry.WetookextraprovisionsforMFIbusinessbecauseof massivefloodsinTamilNaduand because of seasonality. We expect credit cost to normalise in H2 FY25 as guided earlier.

Ontheprofitabilityfront, theCoreOperatingProfit(IncomelessOpex)rose31%YoYexcludingtradinggains. Thiscontinueson thebackofstrongcore OperatingProfitinFY24, whichwasup 31%fromRs. 4,607 crorein FY23 to Rs. 6,030 crore in FY24” 

About IDFC FIRST Bank

 IDFC FIRST Bank is a new age Universal Bank in India built on the foundations of Ethical Banking, Digital Banking, and Social Good Banking. We are building a world class bank in India.

As part of the Bank’s ethical banking approach, it applies a”Near and Dear” Test to its products, so that the employees of the Bank serve only such products they’d want for their own loved ones. It believes income earned unethically is not worth earning.

Therefore, the Bank avoids complicated descriptions, calculations, and legalese that customers don’t understand. It abolished all charges on Savings Accounts including for Debit Cards, IMPS, RTGS, NEFT, Cash Deposit,“Non-Homebranch”access,CashwithdrawalsatATMsandatbranches,3^rdpartytransactioncharges at branches, SMS Alert, Cheque book, Demand Drafts, Pay-order, duplicate statement, and all such services thatareusuallychargedinthemarket.Itfollowstheprinciplethatit won’ttouchits customers’ bankaccountfor one reason or other. It is the first and only bank in India till date to do so.

IDFCFIRSTBankisthefirstbankinIndiato offermonthlycreditonsavingsaccounts. Thecredit cardshaveno hiddencharges.ItoffersLifetimeFreewithoutminimumspendconditions,never-expiringrewardspoints,zero interest on cash withdrawal at ATMs, dynamic low APR and much more. Fees if any are transparent and described neatly in a manner a common person can understand. Every product offered by the bank is highly customer friendly, most often the best in the industry.

As part of technology led banking, the Bank has built a modern technology stack and has built an advanced mobile app with 250+ features such as Goal based investing, MF investment assistance, electric-speed payments, Account Aggregator, MF Aggregator, Personal Finance Manager, Auto categorisation of spends, single app for personal and business banking, UPI on Credit Cards, travel and shop, bill and recharges, deals and reward redemptions, which offer great convenience to the customers. For business customers the Bank offerson-the-gobulkpayments,abilitytopayincometax,GST,customsduty,andconnectedbankingwithERP solutions.

As part of the Social Banking theme, the Bank’s business model is naturally geared to social banking. It has developeduniquecapabilitiesforfinancingbottomofpyramidcustomerswithconsistentlyhighassetquality. TheBankhasfinancedover40millioncustomersincluding0.3millionSMEs,0.9millionlivelihood(cattleloans), 16 million lifestyleimprovementloans (for laptops,washing machine, etc.), 1million sanitation loans (toilets, waterfittings),6.5millionmobilityloans(2-wheelersandcars),andhomefinancing(over100,000homes),and 15 million loans to 4.3 million women-entrepreneurs. It also offers other retail and rural loans such as Kisan Credit Cards, harvest financing, gold loans etc.

IDFCFIRSTBankisaUniversalBank,andoffersendtoendCorporateBanking,TradeFinancesuchasissuance ofLCs& BGs, SBLC, PackingCredit, Pre-shipmentandPost-shipmentFinance, Treasuryproductsincludingrisk hedging solutions like Forwards, Swaps, Options, and other Forex Solutions, SME Banking, Wealth Management, NRI banking, Cash Management, Nostro& Vostro account operations, Escrow facilities, Correspondent Banking, Fastag, Toll-acquiring, Dealer Finance and Purchase/Sales Invoice discounting.

ESGGoals:TheBankisincorporatingESGineveryaspectofworkingandhashighESGscores.TheBankbelieves thattogetan opportunity tocreateanewage,ethicalandworldclassBankforIndiaisagreatprivilegeforits employees.

Cautionary Statement: “Statements made in this release may contain certain forward-looking statements based on variousassumptionsontheBank’spresentandfuturebusinessstrategiesandtheenvironmentinwhichitoperates.Actual resultsmaydiffersubstantiallyormateriallyfromthoseexpressedorimpliedduetoriskanduncertainties.Theserisksand uncertaintiesinclude the effectof economicand politicalconditionsinIndia and abroad, volatility in interest ratesand in the securities market, new regulations and Government policies that may impact the Bank’s businesses as well as the ability to implement its strategies. The information contained herein is as of the date referenced and the Bank does not undertakeanyobligationtoupdatethesestatements.TheBankhasobtainedallmarketdataandotherinformationfrom sources believed to be reliable or its internal estimates, although its accuracy or completeness cannot be guaranteed.”